Investors move fast past a few specific red flags: CAC payback stretching past 18-24 months for a venture-pace business, LTV:CAC below roughly 3:1 with no credible path to improve it, gross margin too thin to ever support healthy unit economics even at scale, and rising CAC over time without a corresponding rise in deal size or retention — a sign the easy customers are already gone. Blended metrics that hide a much worse picture in the largest channel are another common flag once diligence gets past the headline numbers.
The fastest way to get ahead of this is to know your own numbers cold before a diligence process forces the question.